TVS Motors records a double digit growth for the month of May

Chennai-based TVS Motors, one of India's biggest two-wheeler manufacturers with a 14 per cent market share, is again in the news, but this time for a good reason. The investors were not impressed with the Q4FY16 results and therefore the shares on the bourses mostly traded in the red during month of May.  However, this time it is good numbers the street will cheer for.

The company’s two wheeler sales for May has increased by 13 per cent as compared to the previous quarter. In May 2016 the company sold 2,38,320 units. Domestic two wheeler sales have grown by 17.9 per cent, increasing from 175,533 units in May 2015 to 206,886 units in May 2016. Scooters' sales of the company have grown by 20.2 per cent, increasing from 54,426 units in May 2015 to 65,434 units in May 2016. Motorcycles' sales have grown by 5.6 per cent, increasing from 91,344 units in the month of May 2015 to 96,485 units in May 2016. Company's total sales have grown by 11 per cent in the month of May 2016.

TVS Motor has reported higher-than-expected net profit in Q4, but investors were disappointed by the miss in EBITDA or operating margin. TVS Motor's EBITDA margin has declined by 30 basis points year-on-year and 80 basis points quarter-on-quarter to 6.3 per cent in Q4, weighed down by higher advertisement and promotional expenses.

Another worrying factor for the company is its exports. TVS Motors' exports to Africa declined by 10 per cent in FY16, slump in oil prices and currency fluctuations being the major headwinds to export growth in Africa.
Company's total exports have registered sale of 35,545 units in the month of May 2016 as against 43,595 units in May 2015.

The shares on Wednesday closed positive and shares could be in focus on Thursday’s early trade. The share closed at Rs 288.60, up by 1 per cent.